Most U.S. spot natgas prices rise on weekday demand, more cold

March 04, 2013|Reuters

* Cold lingering in much of the nation * Gas futures also higher on continued cold * Nuclear power plant outages remain above normal

By Eileen Houlihan NEW YORK, March 4 (Reuters) - Most U.S. spot natural gasprices rose for a second straight session on Monday, lifted bythe return of weekday industrial demand and lingering coldwinter weather in much of the nation. Stronger gas futures, lifted by forecasts for continuedcold, and above-normal nuclear power plant outages also helpedkeep momentum to the upside, traders said. Bucking the trend was gas for Tuesday delivery at thenation's benchmark supply point, Henry Hub inLouisiana, which slid 1 cent to average $3.53 per millionBritish thermal units. Hub cash gas gained 6 cents on Friday for gas deliveredthrough Monday. Late deals also eased slightly to 4 cents over thefront-month April natural gas futures contract on the New YorkMercantile Exchange, from deals done late Friday at an8-cent premium. Monday's Hub average was above the March monthly index of$3.43 and well above the year-ago price of $2.31. The front-month futures contract traded late up about 7cents at $3.521. In major consuming markets, gas on the Transco pipeline atthe New York citygate rose 1 cent to $3.86, whileChicago gas was 5 cents higher on the day at $3.70. (For more U.S. spot natural gas prices, click on <0#NG-US>) Forecaster MDA Weather Services, in its one-to-five-dayoutlook, called for below-normal readings across much of thecountry, with the cold concentrated from the Midwest to theSouth. The latest National Weather Service six-to-10-day forecastissued on Sunday called for below-normal temperatures for mostof the nation, with some above-normal readings on the West Coastand in parts of New England. Nuclear outages totaled about 15,800 megawatts, or 16percent of U.S. capacity, down from 19,200 MW out a year-ago butup from a five-year average outage rate of 13,300 MW.

ABOVE-AVERAGE STORAGE DRAW U.S. Energy Information Administration data last week showed domestic gas inventories fell in the prior week by 171billion cubic feet to 2.229 trillion cubic feet. The weekly draw came in well above the five-year averagedrop for that week, and storage is now 12 percent below lastyear's record-high levels and 16 percent above the five-yearaverage level. (Storage graphic: http://link.reuters.com/mup44s) Withdrawal estimates for this week's storage report rangefrom 120 bcf to 160 bcf versus a 92 bcf draw in the same week in2012 and a five-year average drop for that week of 107 bcf. Most analysts expect storage to end the heating season atabout 2 tcf, or 16 percent above average, but 19 percent belowlast winter's record-high finish of 2.48 tcf.

OUTPUT COULD BE STARTING TO SLOW Baker Hughes data on Friday showed the gas-directeddrilling rig count fell for the fourth time in five weeks,dropping by eight to 420. (Rig graphic: http://r.reuters.com/dyb62s) The gas drilling rig count is hovering just above the 13-1/2year low of 413 hit in early November, but production is stillhigh. EIA data last week showed gross natural gas output inDecember slipped slightly from November's record high, the firsttime in four months that production failed to set a new peak. But most analysts pegged the decline to cold weather in theSouthwest that likely froze wells, not producers intentionallycurbing dry gas flows. The EIA expects marketed gas production in 2013 to hit arecord high for the third straight year.